I cannot give you a solid answer as to why exactly, but I can comment on some relevant things.

First, we have not always been equally worried about studying and keeping alive the music of the past. The modern study of music and the practice of having all kind of concerts with music written long long ago dates mostly from the 19th century.

Musicology was born in the German speaking world in the 19th century. They started calling Mozart/Haydn/Beethoven "classical," and Bach/Handel were the great "baroque" masters. So in a way, they defined a lot of what is studied as classical music. They had some of the greatest composers, and they also made them poster boys for what they were calling classical music.

Before the 18th century, you find a lot of French and Italian names. The German world really got their stuff together in the late 17th century and kept it for a while: Leibnitz, Kant, Goethe, Schiller, Hegel, Schopenhauer, Nietzsche. It was not just music or the arts, the German speaking world transformed philosophy and science as well.

Some of the fine European historians will be able to tell us more about the economic and social circumstances at this time (I can't really tell you much outside of the musical aspects). It might be a good idea if you post another question with a title to lure specialists who can tell us about that...

The musicians in the German school wrote different music. Italy had super great opera in the 18th century (and certainly did well in that area in the 19th). German music from that period made a lot of emphasis in structure, and the German speaking music theorists shaped a lot of what classical musicians use today to discuss music.